Rules out on trading of natural gas

MANILA, Philippines — The Department of Energy (DOE) has issued rules to regulate the importation, trading, supply and distribution of natural gas in the country with an aim to become a liquefied natural gas (LNG) hub in the region.

The agency issued a circular "Implementing the Natural Gas Quality Standard for All Natural Gas Supply in the Philippines” to ensure a unified and coordinated effort towards establishing a successful and robust natural gas industry.

Under the rules, the DOE will require all businesses engaged in natural gas to submit the appropriate reportorial requirements in compliance with the Philippine Downstream Natural Gas Regulation (PDNGR).

The PDNGR details the rules and regulations governing the downstream natural gas industry to develop a market and gain energy security and sustainability.

The reports will include the use of standard measurements for natural gas namely cubic meters (m3) for natural gas under standard temperature and pressure (STP); joules (J) for natural gas energy; megajoules per cubic meter (MJ/m3) for superior calorific value and wobbe index; percent mole  for the chemical composition of natural gas such as methane, oxygen, total inerts; milligrams per cubic meters for total sulfur and hydrogen sulfide.

A business which fails to comply with the standard set could be used by the DOE as grounds to suspend or cancel the company’s accreditation to import and transport natural gas in the country.

Under the PDNGR, the DOE is accepting proposals from companies interested to build the LNG terminal.

The LNG facility is targeted to make the country an LNG hub for Asia, complementing Japan and Singapore.

It plans to start constructing the country’s LNG hub by mid-2019 to safeguard against the anticipated expiration of the Malampaya gas facility contract  by 2024.

So far, the DOE has issued notices to proceed to Tanglawan Philippine LNG Inc. and First Gen Corp. to build their respective LNG terminals.

The Malampaya project currently supplies fuel to five natural gas plants with a total installed capacity of 3,211 megawatts, equivalent to 21.33 percent of the installed capacity of the Luzon grid and almost 15 percent of the country's total installed capacity.